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77 Smuggling in India Report 2024-25

Overview

In 2024–25, India emerged as a key player in global trade, with exports surpassing
$820 billion, a 5.5% increase from the previous year and imports surpassing $915
billion, a 6.8% increase from the previous year. However, this growth brings rising
challenges in ensuring trade compliance and combating fraud. As supply chains
grow more complex, digital processes expand, and trade facilitation improves,
fraudsters are finding new avenues to exploit systemic vulnerabilities. To support
this growth momentum and advance the Viksit Bharat 2047 vision alongside
ease-of-doing-business goals, it is imperative to strengthen fraud detection capa-
bilities and compliance frameworks to ensure sustainable and secure trade
growth.

Drivers of Commercial Fraud in India
Evasion of duties and taxes, circumvention of Foreign Trade Policy (FTP) and other
regulatory requirements, and illicit financial flows through trade channels are the
key drivers of commercial customs fraud in India. High duties and taxes on
imported goods, combined with the profitability of commodities like gold, elec-
tronics, and luxury items, drives misdeclaration, under-invoicing, misclassifica-
tion, and smuggling. Globalization, rising trade volumes, surge in e-commerce
shipments, and growing demand for restricted and prohibited goods, coupled with
the misuse of modern technologies and sophisticated concealment methods, are
further fuelling commercial fraud.

Commercial Fraud Typologies and Cases

A. Import Fraud

In FY 2024-25, DRI booked 542 cases of import fraud, involving duty evasion
exceeding ₹2,606 crore, across various typologies such as misdeclaration, misclas-
sification, undevaluation, misuse of end-use notifications, evasion of anti-dump-
ing duties (ADD) and countervailing duties (CVD), FTA-related frauds, and misuse
of EOU/EPZ/SEZ schemes.

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